Anti-smoking groups, buoyed by a pledge by Prime Minister Kevin Rudd to "get serious" about the $35 billion cost of tobacco-related diseases in Australia, are urging him to solve his revenue problem by raising taxes on cigarettes.

Announcing $19.5 million in funding for cancer research in Sydney, Mr Rudd said today that cancer was a "number two killer" in Australia and therefore a "number one priority" for the Government.

"Around 30 per cent of cancer is caused by tobacco consumption and it's estimated this will kill 15,000 Australians each year," Mr Rudd said.

"That is far too many and it's also really expensive for the country to deal with.

"We need to get serious on this major driver of cancer in Australia.

"There is a limit to the number of taxpayer dollars available to health.

"I say again, when it comes to cancer, treating cancer and smoking-related cancers costs the Australian taxpayer hundreds of millions of dollars each year and frankly these are funds which we have to raise from the taxpayer."

His comments have sparked speculation that this week's economic statement due to be handed down by Treasurer Chris Bowen could include an increase in the taxes imposed on cigarettes and other tobacco products.

Anne Jones from anti-smoking group ASH welcomed Mr Rudd's comments and said the Government should hike the tax on tobacco to cut smoking rates.

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"It's a win-win," Ms Jones said. "It gives the Government revenue and cuts the take-up rates in smoking as well as cutting consumption.

"They'd be crazy not to take [the opportunity]."

Labor last raised the tobacco excise by 25 per cent in April 2010, adding about $2 to the cost of a 30-pack of cigarettes.

The increase was forecast to raise $5.5 billion over four years.

Before that, the last increase in tobacco excise was a 10 per cent hike in 1995-96.